Large Apartment Sales Exploding in County

If investors needed incentive to enter the Ventura County real estate market, they received it in the capital gains tax reduction passed last year and the overall improvement in the local economy.

So says Ron Cuff, a senior apartment sales specialist for Thomas Associates, an investment real estate brokerage in Ventura.

Cuff credited those developments with creating a 114% increase in large apartment sales in the 18-month period between June 30, 1996, and Dec. 31, 1997, compared with the same period between 1995 and 1996.

“The economy basically bottomed out as far as real estate goes in 1995, and a change in the capital gains [tax] tends to stimulate market activity,” Cuff said. “A lot of the activity is also in the form of tax-deferred exchanges.”

According to Cuff’s semiannual market survey, based on statistics provided by Comps Inc., a San Diego-based real estate information firm, there were 45 sales of apartment sites of five units or larger in the county during the recently ended 18-month period, compared with 21 for the 18 months prior.

The majority of sales, 27 buildings totaling more than 1,000 units, occurred in the Oxnard-Port Hueneme area. Only 11 large apartment buildings were sold during the previous reporting period. The median purchase price of the 27 buildings was $475,000.

For the entire county, the highest-priced sale during the period was a $33-million purchase last June of a 370-unit complex on Majestic Court in Moorpark. A 400-unit site on Ventura’s Hill Road sold for $29 million, also in June.

In all, nearly $157.7 million changed hands in the sale of large apartments in the county. Cuff said much of the interest in Ventura County apartments has come from investors outside the state and, in particular, from real estate investment trusts (REITs).

“We’ve seen a lot of REIT activity coming in--these guys are coming in like gangbusters, just buying anything that makes sense,” he said. “The biggest reason is that there’s not so much money going into Wall Street. They have to spend it and spend it wherever they can. And they think there’s an upside in this area.”

Cuff began issuing the market surveys in June 1997 and will publish his next report this coming June.

“I put it out primarily for apartment investors, so they know what’s going on in the market,” he said. “I don’t foresee any changes in the market’s [direction]. I think sustained growth is what we’re in for.”